John Lewis staff receive 14pc bonus

John Lewis's 75,000 staff have been awarded bonuses equivalent to 14pc of
their annual salaries.

The bonus was announced in all John Lewis store and Waitrose supermarkets around the country to cheers on Wednesday.

Though it was down on last year's 18pc, and the lowest for 3 years, many feared it would be in single digits.

Noel Saunders, managing director of the Stratford department store, was careful in managing expectations, a technique John Lewis managers have honed over the years. And he promised the assembled crowd, who had gathered around the balconies, that he would dance a jig in front of the staff if the bonus was in double digits. He was as good as his word and performed a 10 second ditty.

Nilpa Bharadia, who has worked for John Lewis for 7 years in stock management, said: "It's just fabulous. We are not immune from the recession. We know what is going on outside these four walls. My father was made redundant last year."

She said she'd spend her bonus, worth over 7 weeks' salary, on taking her mother abroad for her 60th birthday.

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However, while there were cheers from the staff, or partners, at the bonus being better than expected, the group made clear it had suffered from a tough year, along with many of its rivals on the high street. The Partnership profits, before tax and bonus, fell 3.8pc to £354m. The chairman, Charlie Mayfield, said the consumer economy may never return to the state it was before the recession, saying 2011 was the worst year the high street had faced since the downturn.

Andy Street, managing director of John Lewis department store division, explaining how operating profits fell from £198m to £158m, said: "it's all about managing the move to multi channel leadership, anticipating how the customers want to shop with us. In the short term that did dent profits."

He said investment in its website and click and collect was expensive, while the cost of maintaining its Never Knowingly Undersold promise to match rivals on price cost the department stores £24m more last year than the year before.

Waitrose, too, said it ws hit by opening new shops and cutting prices. During the year 27.8pc of all of its goods were on promotion, up from 17pc the year before. Its Essentials range, a selection of cheaper products, grew by 10pc to take the brand to £1.03bn of sales.

This year's bonus pot was £165.2m.

Mr Mayfield said events such as the Queen's Diamond Jubilee and the London 2012 Olympic and Paralympic Games would hopefully provide a lift for consumers this year. "I believe that while 2012 will remain challenging, we will actually see some easing of conditions."

Sale at Waitrose, which has 272 branches and increased its market share by 0.2pc to 4.1pc over the year, reported 7.9pc increase in sales, excluding VAT, to £5.1bn. However, operating profit fell 5pc to £260.6m as investments in store space and new formats held back earnings.